Tweet This
Global compliance is emerging as a more important offering for under-the-hood, tech commerce processing companies.
This was my take-away after a recent sit-down with Cleverbridge co-founder and VP of Operations Craig Vodnik, who introduced me to Daniela Hagen, his Director of Global Compliance and Information Security.
Compliance management next big thing for online payments processors.
Emerging European privacy laws pose a real risk to American companies, even those that don’t have physical locations across the pond, Hagen said. European citizens doing business online with American firms can file potentially costly complaints over privacy issues, Hagen said. And European laws, reflecting the greater demand for personal online privacy, are much more restrictive than American laws.
She referred specifically to the European Union’s General Data Protection Regulation, details of which were officially released this month, though they won't be fully enforced until 2018.
At the heart of the rules is a different notion of privacy than Americans are used to. While we focus primarily on credit card and social security numbers, Hagen said Europeans go further, demanding that “everything connected to you as a person” be protected online. This means the standard practice of American firms to not only collect that data but use for targeted marketing, and to resell it, could lead to trouble.
Vodnik said it isn’t entirely clear what liability American companies would have. But he noted that companies like Amazon have settled claims over state taxes due for online purchases. He referred to the online retailing giant’s 2012 Texas settlement as a “canary in a coalmine” for digital retailers who thought the fact that they lived in the cloud protected them from local regulations on the ground.
“In the early days (online retailers) might say ‘I’ll just take the risk,’” he said. “Now you’re going to have think about whether you’ll be required to pay back taxes. It’s an open question that people haven’t thought about much.”
In the case of European privacy concerns, it would be fines rather than taxes that companies might face. And Hagen said clients increasingly are looking for protection from risk.
“You have to monitor them (regulations) constantly,” she said. “It’s a constant challenge, not just a one-time challenge.”
Hagen said customers who signed on primarily for subscription management and payments processing are increasingly asking for help on compliance. That means Cleverbridge, a 10-year-old veteran stalwart on the tech startup scene here, is seeing its core business expand, Vodnik said. Compliance, once a we-can-handle-that-for-you-too add on, is now a key offering.
